Government report into plastics and chemicals

Australia’s Productivity Commission has released a report into the national regulation of plastics and chemicals. The supplementary report has additional topicality as it is released a week before the Review Panel into Model OHS Law presents its report to the government. The key points of the Productivity Commission report are

“The Productivity Commission has recently completed a research report on the regulation of chemicals and plastics in Australia. In most cases, national approaches to regulation were found to deliver significant benefits compared with each state and territory pursuing its own approach. This supplementary paper provides a more detailed examination of some of the features of these national arrangements.

National approaches to regulation should draw on the strengths of each level of government:

Commonwealth, state and territory governments acting together through Ministerial Councils or other forums can provide leadership and policy frameworks for national issues.

The Australian Government may be best placed to play a role in policy coordination, and to undertake national risk assessments.

State and territory governments are often best placed to enforce regulations and respond to the needs of sub-national constituencies.

Improvements in national consistency can be achieved through a range of mechanisms, including through jurisdictions:

adopting uniform regulations

harmonising key elements of their regulatory frameworks

mutually recognising other jurisdictions’ regulations.

In chemicals and plastics, the most common legislative mechanisms for achieving national consistency have been to use template or model legislation, regulations and codes of practice. The template and model approaches can be effective, but both have their weaknesses.

Because the process of developing and implementing nationally-consistent regulations can be costly and drawn out, reform should only be pursued where there are prospects of material net benefits.

In the past, the Commonwealth has provided incentives for state and territory governments to forgo some sovereignty so as to achieve the benefits of national consistency. This approach was effective in encouraging and enabling the reform process.”

The report recommends that national intergovernmental bodies set policy, the national government coordinates policy and the States enforce it.

The three mechanisms for consistency will be familiar to safety professionals and OHS advocates.

“adopting uniform regulations” – already being investigated through the national review panel

“harmonising key elements of their regulatory frameworks” – this was flagged almost two decades ago by the National OHS Commission and work in some industrial and regulatory areas has been completed on this

“mutually recognising other jurisdictions’ regulations” – the east coast states have already achieved this with some of their licencing. OHS regulators in New South Wales are already co-producing and co-badging OHS guidelines

Although the development and implementation of legislation should not be dictated to by economics, the review panel came about through a push to reduce red tape and business costs so it is unlikely that any suggestion that may increase cost to business will appear, particularly as the Prime Minister is reiterating the hard financial challenges we all face.

The risk in an approach where

“reform should only be pursued where there are prospects of material net benefits”

is that important long-term improvements can be ignored or, worse, dismissed.

The last point above seems to support the recent statements by the Minister for Workplace Relations, Julia Gillard, on achieving trade-offs, some would say pay-offs, at state level in order to achieve change through the intergovernmental consultative structures.

It is important to note that the Productivity Commission’s report is not about OHS but industrial regulation. The release of the Commission’s report is likely to be a coincidence but, for some sectors, it can be seen as preparatory for the OHS Law Review Panel’s final report.